Current events in the words of the students of Vinod Gupta School of Management, IIT Kharagpur

Author: shringiabhishek

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

The market redesign of telecom market by the launch reliance jio has re-triggered the trend of mergers and acquisitions among tel-cos. The sector of telecommunication has seen several mergers in the past 4 years’ like MTS and Aircel merging in Reliance communications. But this merger talks between is Idea and Vodafone is about the fight to become no. 1 tel-cos in the country. It is about adding new customers and grow revenue market share(RMS), adding value to customer service by the high end experience of Vodafone and Idea’s distinct corporate ecosystem to drive the targeted synergies towards a healthier bottom-line. This merger will result in the country’s largest tel-co replacing Bharti Airtel.

Reliance Jio started its work by officially acquiring 95% of the shares of Himachal Futuristic Communications Ltd (HFCL) in 2012. But this plan started much before in 2010 when reliance industries on back hand with help of HFCL took PAN India license for 4G spectrum such that the other companies does not come to know and the spectrum could be purchased at much lower cost in 2010 spectrum auctions by TRAI. This blasting entry by Reliance industries in telecom sector in 2012 via Project Vijay, later changed to Reliance Infotel and then Reliance Jio created a bruising impact on the existing telecom companies in the market like Airtel, Vodafone, Idea, Tata Docomo, and BSNL. Specially the free voice and data service by Reliance Jio that was to be given till December 2016 and later extended till March 2017 has resulted in worse quarter for telecom companies disturbing their revenue model and decreasing their profits by as much as 60%.

To fight the current scenario Vodafone Group doesn’t have much of the choice but to accelerate its expansion moves in India- likely with the help of Idea Cellular. Although this acquisition will have several road blocks like Indus tower stake holding, regulatory hurdles associated with spectrum caps and significant market power in terms of combined customer base and RMS, but it can be dealt in a year time and by surrendering excess spectrum. Another major problem the existing tel-cos face against Jio is that they own license of only limited states across India like Idea have of only 11 circles, Vodafone in 14 circles, airtel in 16 circles only whereas Reliance Jio owns PAN India license across the country.

In a country like India whose telecommunication network is the second largest in the world by number of telephone users (both fixed and mobile phone) with 1.053 billion subscribers as on 31 August 2016 this process of competitiveness and mergers will not only create a big telecom giant in India but also will increase the competitiveness in the Indian telecom market in terms of providing quality service, technology and providing a competitive pricing to customer base in terms of adding value for them. And this competition will further facilitate a faster growth of country in a new direction towards the new era of digital transformation. The path on which the journey of success has started and will go beyond the infinity.

The following article is based on my own interpretation of the said events and/ or publicly available information. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

The brand new entrepreneurship spirit in India is challenging the conventional wisdom and rewriting the rules for the next generation of entrepreneurs, entertainers, educators and more. They are a passionate and formidable bunch and the goal is nothing short of breaking the status quo and transforming the world.

In a recent event a small country in Northern Europe, including more than 1,500 islands, the Republic of Estonia has launched an e-residency programme for India, a digital identity, available to anyone in India interested in operating a location-independent business online.

What is e-residency?

It is a virtual residency in which the program gives the e-Resident a smart card which he/she can use to sign documents and complete all public and private formalities related to company online. But, e-Residency is not related to citizenship and does not give the right to enter or reside in Estonia.

Benefits and limitations of e-Residency

E-residents will have their financial footprint monitored digitally, in a manner stated to be transparent. Residents pay tax in their home countries, which provide them with the everyday services they use and not Estonia.

e-Residency allows: company registration, document signing, encrypted document exchange, online banking, tax declaration, fulfillment of medical prescriptions. Other services become available as the scheme is expanded. A smart card issued by the Estonian Police and Border Guard Board in Estonia or at an embassy is used for access to services.

How will this affect Indian Start-ups?

India stands ranks third globally with over 4200 startups and growing at a rapid pace with a projection of over 11500 startups by year 2020. The fast growing world of entrepreneurship and their success in India has led several countries to focus some part of their economy on the Indian market and its potential to generate revenue for their country.

When the world is moving fast from being local to global and now Glocal (Globally Local) this programme, which is available to any business, startup or freelancer based in India, will help E-residents to establish an Estonian company online within a day, administer the company from anywhere in the world, manage accounting records and declare Estonian taxes online, digitally sign and transmit documents and contracts, have access to international payment service providers and conduct e-banking and remote money transfer, all this from India. Thereby not only helping Indian companies to expand and compete globally but also in reducing the cost of trading across the globe. This will also help local firms by being an entry door for Europe and maximize the benefits of the EU Single Market’s harmonized rules, further helping them to showcase their talent, resulting in increase in credit rating, market share, revenue and profit for the companies as well as both the countries.